SAN FRANCISCO (Reuters) -
Google Inc's YouTube said on Tuesday that it plans to
launch a paid streaming music service, amid criticism
that its existing, free video website might block the
music videos of labels that do not agree to its terms.

YouTube has partnered with "hundreds of major and independent" music
labels for the new service, the company said in a statement,
confirming long-running rumors that the world's most popular online
video website will offer a paid music service.

The news comes as some music trade groups have criticized YouTube's
plans to potentially block the content of certain labels from
appearing on YouTube's free, ad-supported Website unless they sign
deals to participate in the new, subscription streaming music
service. The deals that YouTube is offering are on "highly
unfavorable, and non-negotiable terms," according to a news release
issued by the Worldwide Independent Music Industry Network last
month.

YouTube declined to comment on the terms of the deals, but said in a
statement that the new service would provide new revenue for the
music industry.

"We’re adding subscription-based features for music on YouTube with
this in mind - to bring our music partners new revenue streams in
addition to the hundreds of millions of dollars YouTube already
generates for them each year," YouTube said in a statement.

YouTube has already signed deals for the paid service with 95
percent of the music labels that it previously had deals with for
its existing, ad-supported music video website, a person familiar
with the matter said. Blocking certain music labels' videos from
appearing on YouTube's free website might be necessary in order to
provide a consistent user experience for the paid service, the
person said.

The YouTube service is expected to launch at the end of the summer
and will allow users to listen to music without any ads, according
to a person familiar with the situation. Among the other features
expected are the ability to listen to music offline and the ability
to listen to an artist's entire album instead of just individual
songs, as is currently the case on YouTube, the person said.

Streaming music services such as Spotify and Pandora are becoming
increasingly popular among consumers, as digital music downloads
decline. Apple Inc announced plans to acquire streaming music
service and premium headphone maker Beats for $3 billion last month.

Google launched the $9.99-per-month Play All Access subscription
music service in 2013. The forthcoming YouTube paid music service
could potentially work in coordination with the Play service so that
consumers aren't forced to subscribe to two separate services, the
person familiar with the situation said.